Bonding LP Tokens
Last updated
Last updated
To provide Liquidity on the Pool click on Add/Remove Liquidity
Select the amount of tokens you want to Provide to the Pool. Remember to match the entire amount of the liquidity you want to add.
Now click on Add Liquidity and confirm the transaction on Keplr. To start Earning Liquidity, now you have to Bond your LP tokens. On the voice “Available LP Tokens” now you can view the amount of tokens that you’ve decided to Add into the Pool.
Click on Start Earning
Choose the Unbonding Period (the time that have to pass before you get your liquidity back in the event you want to unbond it). The higher the unbonding period, the higher the APRs will be.
Click on “Max” to Bond all your LP tokens or manually input the value you want to bond and then "Bond Tokens"
You have correctly bonded your Assets and you are earning daily rewards. To view the amount of the Liquidity you have provided in the Pool, click on the Pool and consult the index “My Liquidity”
The process of bonding LP tokens involves staking these tokens into a liquidity pool and locking them up for a set period of time in exchange for additional tokens. This process is also known as yield farming.
When LP tokens are staked into a liquidity pool, they represent a share of the total liquidity within that pool. When a user bonds their LP tokens, they are essentially pledging their share of the liquidity to be used for other purposes, such as providing liquidity for other pools, participating in governance, or even receiving additional rewards.
In exchange for bonding their LP tokens, users are often provided with a new token that represents their locked liquidity, often called a "bLP" token or "bonded LP" token. These bonded LP tokens can then be used to participate in other activities on the platform, such as providing liquidity for other pools or participating in yield farming.
The benefit of bonding LP tokens is that it allows users to earn additional rewards for providing liquidity while also reducing the risk of impermanent loss. By locking up LP tokens, users are reducing the amount of liquidity in the pool and therefore reducing the potential for price fluctuations that could result in losses for liquidity providers.
Overall, bonding LP tokens is an important mechanism for incentivizing liquidity providers and helping to ensure that liquidity remains stable on decentralized exchanges and other DeFi platforms.
